Loyalist to Raise $5.0 Million Through Bought Deal Convertible Debenture

TORONTO, ONTARIO--(Marketwired - Nov. 14, 2013) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Loyalist Group Limited (TSX VENTURE:LOY) announces that it has entered into an agreement letter with Beacon Securities Limited ("Beacon") on its own behalf and on behalf of other investment dealers (the "Underwriters") to purchase for resale to eligible substituted purchasers, on a "bought deal" basis, an aggregate of 5,000 unsecured subordinated convertible debentures at a face value of $1,000 principal amount per debenture for aggregate gross proceeds to Loyalist of $5,000,000. Loyalist will grant to the Underwriters an option to purchase up to an additional $500,000 principal amount of debentures (the "over-allotment option"). The Company will pay the Underwriters a commission equal to 5% of the gross proceeds from the sale of the debentures. As additional compensation for their services, the Underwriters will be entitled to receive compensation options exercisable for 24 months following the closing date to purchase a number of common shares equal to 5% of the common shares issuable upon full conversion of the debentures sold pursuant to the offering at a price per share equal to the conversion price of the debentures. The offering is scheduled to close on or about December 5, 2013.

"This funding allows Loyalist to head into the new year with funds supporting the Company's continued initiatives of negotiating accretive transactions and then having the time to integrate its acquisitions in an orderly and efficient manner", stated Andrew Ryu, CEO of Loyalist.

The convertible debentures will be in the principal amount of $5.0 million, will bear interest at 7.5% payable in cash semi-annually in arrears on November 30 and May 31, commencing with May 31, 2014, will mature on November 30, 2018 and will be convertible into common shares on the basis of one common share for each $0.60 of principal amount converted (subject to standard anti-dilution adjustments) (with accrued and unpaid interest payable in cash). The debentures will not be redeemable for 3 years following the date of issue but will be redeemable thereafter on not more than 60 days and not less than 30 days prior notice at a price equal to the principal amount plus accrued and unpaid interest to the date of redemption provided that the weighted average trading price of the common shares on the TSXV during the 20 consecutive trading days ending on the fifth trading day preceding the date on which notice of redemption is given is not less than $0.75. The Company will have the right to purchase the debentures for cancellation in the market or by private contract at any time subject to regulatory requirements. On redemption or at maturity, provided that no event of default has occurred and is continuing, the Company may, at its option, on not more than 60 days and not less than 30 days prior notice, and subject to regulatory approval, satisfy its obligation to pay the principal amount of the debentures by issuing a number of common shares obtained by dividing the principal amount which are to be redeemed or repaid by 95% of the volume weighted average trading price of the common shares on the TSXV for the 20 consecutive trading days ending on the fifth trading day preceding the date fixed for redemption or the maturity date (with accrued and unpaid interest to such date to be paid in cash). The debentures will be direct unsecured obligations of the Company ranking subordinate to all secured indebtedness and to all liabilities except those which by their terms ranks equally with or subordinate to the debentures. The debentureholders will have the right to require the Company to repurchase their debentures, in whole or in part, at a price equal to principal amount, plus accrued and unpaid interest, in the event of a Change of Control. A "Change of Control" will be deemed to occur upon (i) a change in voting control or direction of 50% or more of the common shares, or (ii) the sale or other transfer of all or substantially all the consolidated assets of the Company but will not include a sale, merger, reorganization or other similar transaction if the previous holders of the common shares hold at least 50% of the voting control in the merged, reorganized or other continuing entity. The debentures will be issued under, and governed by, a trust indenture to be entered into by the Company with a trustee.

The proceeds of this debenture are to support general working capital purposes and to provide the base for potential accretive acquisition opportunities.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Loyalist

Loyalist owns and operates private education schools in Toronto, Vancouver, and Victoria offering (i) English as a Second Language Courses for international students; (ii) Training programs for teachers, commonly known as TESL; (iii) Professional Development Courses; and (iv) Corporate English for Professionals.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.